Schuette Announces $550 Million National Settlement with SunTrust Mortgage Inc., Michigan Borrowers to BenefitContact: Joy Yearout 517-373-8060
June 17, 2014
LANSING - Attorney General Bill Schuette today announced a $550 million joint state-federal settlement with SunTrust Mortgage Inc. to address mortgage-related abuses. The settlement is expected to bring millions of dollars' worth of additional foreclosure-relief benefits to thousands of Michigan homeowners.
In Michigan, the settlement is estimated to provide $3.6 million in first lien principal reductions or other consumer relief, and approximately $1 million to eligible homeowners who went through foreclosure. The average payment amount, which is contingent on the number of consumers who submit valid claims, is projected to exceed $1,000.
"Today's settlement is the latest action to address the damage inflicted on Michigan homeowners during the national mortgage crisis," said Schuette. "I will continue to be an aggressive advocate for Michigan consumers, every step of the way."
Like the National Mortgage Settlement of 2012 and the Ocwen Settlement of 2013, the SunTrust settlement stems from allegations of misconduct related to mortgage loans, including origination, servicing, and foreclosure. As alleged in the complaint filed today in the U.S. District Court for the District of Columbia, the practices of these companies contributed to premature and unauthorized foreclosures, violations of homeowners' rights and protections, and the use of false or deceptive documents.
While SunTrust has its most significant presence in the southeastern United States, a number of consumers in Michigan are affected. Under the settlement, SunTrust will provide consumer relief including first-lien principal reductions to assist in modifying existing mortgages, and cash payments to borrowers who have already gone through foreclosure.
Apart from the monetary relief, the settlement also imposes significant business reforms designed to improve how SunTrust treats borrowers moving forward. New standards will cover all aspects of mortgage servicing including account accuracy, document production processes, foreclosure practices, and information provided to borrowers. Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement and the Ocwen Settlement, will oversee implementation and compliance with these new requirements through the Office of Mortgage Settlement Oversight.
Schuette noted that the settlement does not preclude Michigan, or any other state, from filing criminal charges in the future, should they be warranted; and the settlement does not preclude individuals or other governmental units from pursuing their own claims.
Parties to the settlement include: 48 additional states, the District of Columbia, the U.S. Department of Justice (DOJ), the U.S. Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Housing and Urban Development (HUD).
How to File Your Claim
Homeowners that are entitled to payments will be contacted by the settlement administrator and provided with claim forms. Homeowners that have a mortgage currently serviced by SunTrust and who are seeking a loan modification should call the servicer toll-free at 1-800-634-7928. Homeowners may also contact SunTrust by email through the Support page on www.SunTrustMortgage.com.
Additional information will be posted on the Attorney General's website at www.michigan.gov/ag when it becomes available. Consumers can also call the Attorney General's Office toll-free at 1-877-765-8388.
Foreclosure Rescue Scam Victim Restitution Fund
In August 2013 Schuette announced the launch of a $7.5 million Foreclosure Rescue Scam Victim Restitution fund as a part of the Homeowner Protection Fund monies received by the State of Michigan to resolve the National Mortgage Settlement. This program is intended to provide restitution payments for victims of foreclosure scams who would otherwise never see a penny of court-ordered restitution.
To read more about the additional programs under the Homeowner Protection Fund, visit: http://www.michigan.gov/ag/0,4534,7-164-46849-309812--,00.html. For more information on the mortgage settlement, including a consumer alert and a Frequently Asked Questions document available for download on the Attorney General's website: www.michigan.gov/mortgagesettlement.
Mortgage Settlement and Homeowner Protection Fund Background
The historic $50 billion National Mortgage Settlement followed state and federal investigations, which alleged that five major mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes. Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.
As of March, 2014, Michigan citizens have received approximately $803 million in benefits from the settlement. The State of Michigan also received a direct payment of $97 million from the servicers. Schuette worked with the legislature and Governor Rick Snyder to establish the Michigan Homeowner Protection Fund to ensure these funds are directed toward victims of foreclosure. On August 1, 2012, Governor Snyder signed legislation creating the $97 Million Homeowner Protection Fund.